Optima Hit With Big Losses

From an article published in the credit card collectors’ newsletter, 1991

American Express was saddled with big losses from its Optima card business. Optima was the credit card American Express came out with in 1987. It allowed cardholders to make monthly payments, instead of like the standard American Express cards which require the balances paid monthly.

Multi-million losses and retrenchment

American Express was expected to write-off $265 million against their third quarter 1991 earnings. 1,700 employees were expected to lose their jobs as a result. 

Optima’s failure is the result of American Express misjudging the credit card market. When others were tightening their credit requirements in the late eighties/early nineties when the recession began, American Express was loosening theirs.

Optima was introduced in 1987 in the hopes it would fend off the company’s main credit card rivals, Visa and MasterCard. American Express is now reconsidering that notion. 

In a plan to turn Optima around, American Express was expected to raise the card’s interest rate more in line with the industry’s average.

Very low interest rate

Optima had one of the lowest bank card interest rates in the industry — 16.5% as compared to the industry’s average of 18.8%. American Express was expected to set aside another $100 million for potential fourth quarter Optima losses.

At the time, there didn’t appear to be any intentions by American Express to discontinue Optima. They were expected to restructure its program to be more strict on credit requirements while raising its interest rate.

Credit card collectors at the time were advised to act as though the card had been discontinued, just to be on the safe side. 

Copyright Greg Tunks, 1991

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Frequently asked questions

You can find out the value of old credit cards by checking how much similar cards sell for. There are several ways to do this.

The simplest way to determine the value of old credit cards is to ask an experienced collector. If you submit an inquiry via our contact form, we can connect you with an expert who can assist you and point out if there is anything rare or unusual in your collection.

Alternatively, you can become a member of the American Credit Card Collectors Society. Membership in our credit card collecting club provides access to resources and knowledgeable members who can help. Benefits of membership include access to a gallery containing thousands of cards with historical pricing information, and access to our entire collection of newsletters, from 1994 through the present day.

You can look at recent sales on auction sites, however, there are some considerations to keep in mind when doing this. Firstly, it’s important to look at selling prices, rather than asking prices. Selling prices are the prices people actually paid, while asking prices can be very different. Secondly, historical sales on some sites are only saved for 3 months, so you may not find something that exactly matches what you have. Thirdly, it is sometimes possible to see rare or unusual cards sell for lower prices than they should have because people do not understand their worth, the ads don't do justice to the card, they're listed in the wrong category, or any combination thereof.

There are always people in our club who are actively buying cards. Collectors tend to focus on a niche, like gas cards or retail cards, or they might focus on a slightly broader area, like bank cards or travel and entertainment cards. Many of the rarest or most unusual cards will exchange hands in private sales. Please contact us if you are thinking of selling your collection.

You can also sell your old credit cards on online marketplaces. You will get the highest price if you sell each of your cards individually, although this approach requires the most effort. At the opposite end of the effort scale would be selling all cards as a job lot, an approach which typically results in the lowest price on a per-card basis. Halfway between these two approaches would be to group cards into different categories and to sell these individual groups, e.g., BankAmericard, Master Charge, oil and gas, retail, and so on.

To join the club, visit the membership section and complete the registration form. You can pay by check or PayPal. We offer annual or lifetime memberships. If you have any questions please contact us via the form on our website.

Credit cards are more worthwhile collecting if they are rare, in good condition, have historical significance, or are associated with famous personalities or events. Valuable modern cards might include those that are difficult to obtain, such as American Express Centurion (a.k.a. ‘black’) cards, while older credit cards might include early independent bank cards, American Express, Diners Club, or BankAmericard (Visa) cards from the 50s/early 60s, or Master Charge (MasterCard) cards from the late 60s. Rare or unusual cards can also be sought after, such as those issued in small numbers, like small independent department stores or gas stations, or cards with appealing aesthetics.

Consulting with other collectors or experts in the club can provide valuable insights. Contact us for more information via the form on our website.

We do not offer an appraisal service in a traditional sense (such services are normally a paid service) but we can connect you with an expert who should be able to assist for free and point out anything rare or unusual in your collection. The simplest way to do this is to submit an inquiry via our contact form.

The American Credit Card Collectors Society accepts donations and is most grateful for any we receive. When donations happen, we strive to find good homes for cards where they will be looked after, matching cards with collectors who will appreciate them. The club may charge members a nominal fee for donated cards, and the proceeds are offset against the running costs of our club. We are a non-profit organization. Running costs include expenses like our convention and website hosting. Donations are most popular for people getting out of the hobby, or when someone has inherited a collection and doesn’t know what to do with it.

If you wish to donate your collection, please contact us via the contact form above.

American Credit Card Collectors Society